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                                                      Calendar No. 208
114th Congress          }                       {              Report
                                 SENATE
 1st Session            }                       {              114-128
======================================================================

 
                 BUREAU OF RECLAMATION TRANSPARENCY ACT

                                _______
                                

               September 9, 2015.--Ordered to be printed

                                _______
                                

  Ms. Murkowski, from the Committee on Energy and Natural Resources, 
                        submitted the following

                              R E P O R T

                         [To accompany S. 593]

    The Committee on Energy and Natural Resources to which was 
referred the bill (S. 593) to require the Secretary of the 
Interior to submit to Congress a report on the efforts of the 
Bureau of Reclamation to manage its infrastructure assets, 
having considered the same, reports favorably thereon with 
amendments and recommends that the bill, as amended, do pass.
    The amendments are as follows:
    1. On page 8, line 20, strike ``the condition of, and 
planned maintenance for,'' and insert ``major repair and 
rehabilitation needs for''.
    2. On page 9, line 4, insert ``for major repair and 
rehabilitation needs'' after ``system''.

                                PURPOSE

    The purpose of S. 593 is to require the Secretary of the 
Interior to submit to Congress a report on the efforts of the 
Bureau of Reclamation to manage its infrastructure assets.

                          BACKGROUND AND NEED

    Founded in 1902, the Bureau of Reclamation (Reclamation) is 
the largest wholesaler of water in the United States and 
supports the design, construction, and management of water 
infrastructure in 17 Western states, including dams, canals, 
irrigation, hydropower, recreation, and water supply 
infrastructure. Reclamation's inventory includes 476 dams and 
dikes, creating 337 reservoirs with a total storage capacity of 
245 million acre-per-feet of water. Much of Reclamation's 
infrastructure was constructed more than 50 years ago and the 
Department of the Interior faces many challenges in maintaining 
this aging infrastructure.
    Reclamation prepares an annual ``Asset Management Plan,'' 
which describes current business practices and performance 
metrics, but does not provide information at the project level. 
S. 593 seeks to expand on the information provided by the Asset 
Management Plan by requiring a detailed assessment of major 
repair and rehabilitation needs at the project level for all 
Reclamation sites. In order to better understand the state of 
Reclamation's infrastructure, the bill requires a report to 
Congress and standardized and streamlined asset data.

                          LEGISLATIVE HISTORY

    S. 1800, a nearly identical bill to S. 593 in the 114th 
Congress, was introduced by Senators Barrasso and Schatz in the 
113th Congress. The Subcommittee on Water and Power held a 
hearing on S. 1800 on February 27, 2014 (S. Hrg. 113-284). The 
Committee on Energy and Natural Resources favorably reported S. 
1800, with an amendment in the nature of a substitute, on June 
18, 2014 (S. Rept. 113-226). The Senate agreed to the committee 
substitute as amended and passed S. 1800 on December 16, 2014.
    S. 593 was introduced by Senators Barrasso and Schatz on 
February 26, 2015. The Subcommittee on Water and Power held a 
legislative hearing on S. 593 on June 18, 2015.
    The Committee on Energy and Natural Resources met in open 
business session on July 30, 2015, and ordered S. 593 favorably 
reported as amended.

                        COMMITTEE RECOMMENDATION

    The Senate Committee on Energy and Natural Resources, in an 
open business session on July 30, 2015, by a majority voice 
vote of a quorum present, recommends that the Senate pass S. 
593, if amended as described herein.

                          COMMITTEE AMENDMENTS

    During the consideration of S. 593, the Committee adopted 
two technical and clarifying amendments.

                      SECTION-BY-SECTION ANALYSIS

    Section 1 provides the short title.
    Section 2 describes the findings.
    Section 3 provides definitions for the Act.
    Section 4 directs the Secretary of the Interior to submit 
an Asset Management Report to Congress within two years of the 
Act's enactment, and specifies that the report shall describe 
Reclamation's efforts to maintain in a reliable manner all of 
its reserved works, such as buildings, structures, facilities, 
or equipment, for which maintenance and operations are 
performed. The report must further include a detailed 
assessment of the major repair and rehabilitation needs for all 
reserved works and, to the extent practicable, an itemized list 
of major repair and rehabilitation needs of individual projects 
at Reclamation facilities, including a cost estimate to 
complete each project, and a categorical rating assignment in 
order to inform the annual agency budgeting process. The report 
shall be made publicly available with the exclusion of 
classified information. A classified version of the report 
shall be made available to the Congressional committees of 
jurisdiction. Further directs that the Asset Management Report 
be updated biennially.
    Section 5 directs the Secretary to coordinate with those 
non-federal entities responsible for the operation and 
maintenance of Reclamation facilities, known as transferred 
works, in developing reporting requirements for needed major 
repair and rehabilitation work for those projects similar to 
the reporting requirements established in section 4.
    Section 6 amends section 1631(d)(1) of the Reclamation 
Projects Authorization and Adjustment Act of 1992 to reduce by 
$2 million the maximum amount of the Federal cost share for a 
project authorized pursuant to section 1617 of that Act in 
order to provide an authorization offset for anticipated costs 
associated with implementation of the legislation.

                   COST AND BUDGETARY CONSIDERATIONS

    The following estimate of the costs of this measure has 
been provided by the Congressional Budget Office:

S. 593--Bureau of Reclamation Transparency Act

    S. 593 would require the Bureau of Reclamation (BOR) to 
assess the maintenance needs of its facilities, develop a 
ranking system to prioritize the rehabilitation needs of 
facilities that it operates, and work with nonfederal partners 
that have taken over the operation of certain other facilities 
to develop similar systems for those facilities that need 
rehabilitation. Under current law, BOR gathers data on its 
facilities, analyzes the data, and makes the results of its 
analysis available to the Congress and the public through its 
budget documents and various other reports throughout the year. 
Under the bill, BOR would need to consolidate those results 
into one report every two years including the ranking 
information and the estimated costs of necessary rehabilitation 
projects. Based on information from BOR, and assuming 
appropriation of the necessary amounts, CBO estimates that 
implementing those provisions would cost $2 million over the 
2016-2020 period.
    S. 593 also would reduce the authorization level for the 
Central Valley Water Recycling Project in Salt Lake County, 
Utah, by $2 million. Under current law, that project is 
authorized to receive up to $20 million in federal funding for 
construction costs. Under the bill, the ceiling would be 
reduced to $18 million.
    On that basis, CBO estimates that implementing the 
legislation would have an insignificant net effect on spending 
over the 2016-2020 period, assuming appropriation action 
consistent with the bill. Enacting S. 593 would not affect 
direct spending or revenues; therefore, pay-as-you-go 
procedures do not apply.
    S. 593 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act. Any 
costs incurred by public entities to comply with the bill's 
reporting requirements would result from participating in a 
voluntary federal program.
    The CBO staff contact for this estimate is Aurora Swanson. 
The estimate was approved by H. Samuel Papenfuss, Deputy 
Assistant Director for Budget Analysis.

                      REGULATORY IMPACT EVALUATION

    In compliance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee makes the following 
evaluation of the regulatory impact which would be incurred in 
carrying out the bill.
    The bill is not a regulatory measure in the sense of 
imposing Government-established standards or significant 
economic responsibilities on private individuals and 
businesses.
    No personal information would be collected in administering 
the program. Therefore, there would be no impact on personal 
privacy.
    Little, if any, additional paperwork would result from the 
enactment of this bill, with the exception of reporting 
requirements associated with the operation and maintenance of 
transferred works.

                   CONGRESSIONALLY DIRECTED SPENDING

    The bill, as reported, does not contain any congressionally 
directed spending items, limited tax benefits, or limited 
tariff benefits as defined in rule XLIV of the Standing Rules 
of the Senate.

                        EXECUTIVE COMMUNICATIONS

    The testimony provided by the Bureau of Reclamation at the 
June 18, 2015, Water and Power Subcommittee hearing on S. 593 
follows:

  Statement of Dionne Thompson, Deputy Commissioner for External and 
  Intergovernmental Affairs, Bureau of Reclamation, Department of the 
                                Interior

    Chairman Lee and members of the Subcommittee, I am Dionne 
Thompson, Deputy Commissioner for External and 
Intergovernmental Affairs at the Bureau of Reclamation 
(Reclamation). I am pleased to provide the views of the 
Department of the Interior (Department) on S. 593, the Bureau 
of Reclamation Transparency Act. The Department supports S. 
593.
    S. 593 is a reintroduced version of bipartisan legislation 
previously introduced by Senators Barrasso and Schatz during 
the 113th Congress. The prior bill was numbered S. 1800, was 
also titled the Bureau of Reclamation Transparency Act, and 
Reclamation testified on the bill in February of 2014. 
Reclamation appreciates the constructive work conducted with 
the sponsor's offices and this Subcommittee to develop a number 
of specific changes to the bill consistent with our 2014 
testimony. These changes were all incorporated into the current 
version of S. 593. Reclamation recognizes the value in 
obtaining additional information on the status of our 
infrastructure. The bill is consistent with a draft 
Infrastructure Investment Strategy and process Reclamation has 
initiated proactively, which I will briefly summarize here.
    For the past year, Reclamation has been developing a draft 
Infrastructure Investment Strategy (Strategy) for assessing and 
reporting on infrastructure investment needs for Reclamation's 
approximately 4,000 unique assets. The Strategy builds upon 
Reclamation's ongoing asset management planning and budget 
processes, including the existing major rehabilitation and 
replacements (MR&R) database. Much of the initial focus of this 
Strategy has been on ``reserved works''; facilities 
constructed, owned, and operated by Reclamation, as opposed to 
``transferred works'', which are those facilities that were 
built and are owned by Reclamation, but which are operated and 
maintained by water and power customers pursuant to contracts.
    Consistent with the directives in S. 593, Reclamation's 
Strategy process will focus on: improving data collection, 
analysis, and reporting on the condition of Reclamation-owned 
infrastructure; categorizing potential investments according to 
relative importance and urgency; and collaboration with water 
and power customers in planning for these investments.
    Based on arrangements originating with Section 6 of the 
Reclamation Act of 1902, over two-thirds of Reclamation's 
facilities are transferred works, managed by non-federal 
project beneficiaries. These operating entities provide 
valuable input to the formulation of Reclamation's annual asset 
management activities. At present, Reclamation's annual budget 
requests include estimates of the appropriated funds needed for 
maintenance conducted by Reclamation at its facilities. The 
estimates in the budget request do not include the amounts 
funded by non-federal beneficiaries for their maintenance of 
Reclamation facilities. Reclamation's budget documents, 
delivered to Congress annually and posted online, are developed 
over a multi-step 18-month process that begins at the field 
office level where managers consider the condition of the 
facilities under their jurisdiction, safety considerations 
associated with facilities' condition, and--very importantly--
the ability of operating partners to fund the work identified 
pursuant to the terms of their contract and requirements of 
Reclamation Law. Investments in MR&R are analyzed and 
prioritized at the field, regional, and bureau levels based on 
criteria such as: Engineering Need; Risks and Consequences of 
Failure; Efficiency Opportunities; Financial Feasibility; and 
availability of Non-Federal Cost Share.
    During this process, Reclamation categorizes the 
information that will go into its budget requests using its 
Programmatic Budget Structure (PBS). The PBS uses two of its 
five primary categories to show the budget request for 
Operations and Maintenance (O&M) activities: 1. Facility 
Operations, and 2. Facility Maintenance and Rehabilitation. It 
should be noted that in addition to the appropriated funds in 
these two categories, a substantial portion of O&M activities 
is paid for directly by water and power users with their own 
funds or project revenues.
    The Facility Operations category includes items and 
activities that are necessary to operate Reclamation facilities 
to produce authorized project benefits for water supplies, 
power, flood control, fish and wildlife, and recreation. This 
category includes not only facility operations by Reclamation 
at reserved works, but also Reclamation's oversight of the 
operations of facilities performed by water user entities at 
transferred works. Facility Operations includes all routine or 
preventive maintenance activities. Routine maintenance is 
defined as recurring daily, weekly, monthly, or annually, and 
most tasks performed by Reclamation maintenance staff are 
included in this category. Also included in this category are 
routine safety and occupational health items, including those 
for workplace safety inspection and hazard abatement. The 
amount budgeted under this category for each facility is the 
funding necessary to perform routine O&M activities. On an 
annual basis, each region, along with centralized program 
management staff, determines the appropriate budget level to 
support staffing and other resources necessary at each facility 
for continued operations to deliver authorized project 
benefits.
    The second category, Facility Maintenance and 
Rehabilitation, addresses the needs over and above the 
resources in Facility Operations, and corresponds roughly to 
the concept of MR&R. The Facility Maintenance and 
Rehabilitation category includes major and non-routine 
replacements and extraordinary maintenance of existing 
infrastructure. This category also includes activities to 
review and conduct condition assessments (facility O&M and dam 
safety inspections), as well as funding necessary for the 
correction of dam safety deficiencies (dam safety 
modifications), the implementation of security upgrades, and 
building seismic safety retrofits. Consequently, most of the 
budgeted items under this category are related to site-specific 
facility needs.
    After Reclamation's field offices identify MR&R activities 
in their jurisdiction that require appropriated funds, they are 
evaluated at the regional level where these are compared to the 
needs and priorities of other activities and facilities in that 
region. There are five regions within Reclamation. The regions' 
PBS allotments for Facility Maintenance and Rehabilitation each 
year are then evaluated at the next level of internal review, 
with Reclamation's Budget Review Committee (BRC) process. A 
given year's BRC is working in advance of a budget request two 
years into the future, and is comprised of senior management 
from across the agency, providing the maximum breadth of 
relevant experience and program knowledge. Each region presents 
its priorities to the BRC, which evaluates the MR&R needs and 
priorities against those of other regions in order to ensure 
that Facility Maintenance and Rehabilitation activities reflect 
Reclamation's greatest overall need and agency priorities. No 
urgent maintenance issues necessary to the safe operation of a 
facility are deferred in the budgeting or facility review 
processes. The end result is a budget request that has been 
prioritized and vetted across the organization, concurrent with 
input from the Department and Reclamation leadership.
    For the purpose of reporting asset condition to the Federal 
Real Property Profile to meet requirements of the Executive 
order 13327, ``Federal Real Property Management,'' and to 
better understand upcoming needs, Reclamation develops and 
annually updates estimates of MR&R needs. This effort, which 
informs the annual budget process, represents an outlook of 
Reclamation's best estimate of reported deferred maintenance, 
and identified extraordinary maintenance, dam safety 
modifications, repairs, rehabilitation, and replacement 
activities at a point in time looking forward five years, 
regardless of funding source, for all assets. The estimated 
total in 2012 amounted to $2.5 billion over five years (fiscal 
years 2013-2017).\1\ It is important to note that a substantial 
portion of projected needs to address the rehabilitation of 
aging infrastructure (roughly $1.2 billion of the $2.5 billion 
estimate) will be financed directly by our water and power 
customers. Cost estimates associated with these identified 
needs range from ``preliminary'' to ``feasibility'' level, and 
should not be collectively assumed to be at one particular 
uniform level of detail. Variability in the MR&R estimates from 
year to year may be the result of additional information 
received from the estimating source (i.e., Reclamation field 
offices and non-federal operating entities), changes in field 
conditions, further evaluations conducted, and work priorities, 
thus impacting the inclusion or deletion of specific identified 
needs within a particular year, or from year to year.
---------------------------------------------------------------------------
    \1\www.usbr.gov/assetmanagement/Asset%20Inventory/
FY%202012%20Reclamation%20 Asset%20Management%20Plan.pdf.
---------------------------------------------------------------------------
    As stated in prior testimony before this Subcommittee, one 
of the main challenges Reclamation faces in securing funding 
for the identified near-term needs as well as longer-term MR&R 
needs is the varying economic strength of our operating 
partners. Given the requirement under Reclamation Law for the 
repayment of maintenance costs either in the year incurred or 
over time, Reclamation must work in collaboration with our 
water and power partners that must repay these investments. For 
some of these partners, the cost-share requirements associated 
with MR&R work are simply beyond their financial capabilities. 
Like any organization tasked with constructing, operating, and 
maintaining a wide portfolio of assets, Reclamation has to 
prioritize its actions to maximize the benefits derived from 
its investment of both federal and non-federal funds. Given the 
substantial economic and financial interest of Reclamation's 
non-federal partners, the development of cost estimates for 
maintenance requirements on reserved and transferred works is 
both collaborative and dynamic. We acknowledge there are 
tradeoffs associated with decisions to fund one identified need 
versus another, but Reclamation's annual budget request 
reflects our best effort to balance those constantly evolving 
needs associated with all elements of our mission.
    The requirements of S. 593 would complement the processes 
described above, and the bill makes allowance for the valuable 
input from operating partners that is central to Reclamation's 
asset management program.
    This concludes my written statement. I am pleased to answer 
questions at the appropriate time.

                        CHANGES IN EXISTING LAW

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, the Committee notes that no 
changes in existing law are made by the bill as ordered 
reported.